California moves to stop balance billing by emergency physicians

A pending state Supreme Court case will determine if a state law banning the practice by in-network doctors applies to out-of-network physicians.

By Amy Lynn Sorrel, AMNews staff. Aug. 28, 2006.

California Gov. Arnold Schwarzenegger's executive order to prohibit emergency physicians from billing patients for costs not covered by health plans has drawn the ire of many doctors. They say the move puts them at the mercy of insurers that regularly underpay for out-of-network emergency care.

The governor's mandate in late July directed the state Dept. of Managed Health Care to create regulations to ban balance billing by emergency doctors who are not contracted with a patient's managed care plan. Under the rules, doctors no longer would be able to bill patients for the difference between the cost of the service and the insurer's reimbursement. The state also will review the criteria that health plans use to value services and develop an independent dispute resolution process "to provide extra tools to help ensure fair and fast payment -- but leave the unwitting consumer out of it," Schwarzenegger said.

Doctors got a slight reprieve after the California Medical Assn. pressed state officials to halt an emergency regulation filed by the DMHC Aug. 10 that would have put the ban into effect almost immediately. Instead, the changes to state insurance rules likely will take hold within the next year, agency officials said.

"When consumers make the correct decision to purchase health insurance, they must not face the possibility that they will not be fully protected," said DMHC Director Cindy Ehnes.

But some doctors say the problem is that insurers do not have enough on-call specialists in their networks to provide emergency care. As a result, patients often get their care from out-of-network emergency physicians who then bear a disproportionate share of the cost of services when health plans routinely underpay or reject their claims.